Nokia moves closer to acquiring Symbian

CIOL Bureau
New Update

LONDON - The world's largest mobile handset maker, Nokia, moved a step closer to grabbing a majority stake in a key industry asset, mobile phone software maker Symbian, by securing a required approval.


Shareholders in British tech firm Psion Plc, which is selling its 31 percent stake in Symbian to Nokia, voted to approve the deal, overcoming opposition from a substantial block of shareholders who felt Psion was being short-changed.

Symbian, a leader in operating software for "smartphones" featuring calendars, contact lists or electronic mail, was once reckoned to be worth up to 1 billion pounds ($1.8 billion). Psion is selling out for an estimated 136 million pounds.

Symbian is becoming increasingly important as the smartphone market expands and Nokia's move -- which still needs to be cleared by regulators -- is being keenly watched by other Symbian shareholders, notably Sony Ericsson, and Siemens.


Some 10 million smartphones were sold in 2003, according to research group IDC. Investment bank Merrill Lynch has forecast the segment will rise to more than 125 million smartphones sold in 2007.

Symbian receives payments from phone makers each time they sell a handset based on its technology.

The market is considered lucrative enough to have attracted software giant Microsoft, which has an operating system for mobiles to rival Symbian's. Other rivals include PalmSource and Research in Motion.


So far, Symbian has been ahead of Microsoft, which has struggled with technical problems and has lacked the sector clout wielded by Symbian's consortium members.

Psion's deal with Nokia, which last year bought a portion of U.S. rival Motorola's stake in Symbian, will take the Finnish company's stake in the firm to 63 percent, and has received a cold reception from Sony Ericsson and Siemens.

Nokia's rivals are keen to see that Symbian's software does not become too closely identified with it. Earlier this week, the head of Sony Ericsson, which owns 1.5 percent of Symbian, said the Symbian operating system "should not be perceived as a proprietary system for any particular manufacturer".


Even after Friday's approval, Nokia may still not end up controlling Symbian. Its partners in the business have the right, under a Symbian shareholders' agreement, to buy some of the shares being sold by Psion, in proportion to their holdings.

The agreement also makes it difficult for any shareholder with less than 70 percent to exercise control.

On Friday, Sweden's Ericsson, which owns 17.5 percent of Symbian, declined to say if it planned to take up its right on Symbian shares. Other shareholders such as Siemens, South Korea's Samsung Electronic and Japan's Panasonic were not immediately available for comment.



The Symbian stake was Psion's biggest asset, and its sale leaves it with a business, which focuses on providing heavy-duty mobile computing devices and wireless local area network systems to enterprises.

News of the deal last month was poorly received by the market and Psion's shares fell 30 percent the day it was announced. They were down 1-1/2 pence or 2.44 percent at 60p by 1621 GMT on Friday.


Psion said 67.25 percent of investors at a specially convened meeting had voted in favor for the deal, overcoming opposition from Psion's largest shareholder, Phoenix Asset Management, which raised the option of a flotation of Symbian.

Gary Channon at Phoenix told Reuters that support from other major investors helped Psion win the vote but the firm would come under pressure to hand most of the proceeds to shareholders.

Psion Chief Executive Alistair Crawford told shareholders that the company would examine ways to return money if it did not see suitable opportunities for investment or acquisitions.

® Reuters